It’s becoming increasingly difficult for Ethereum miners to make money after The Merge because too many of them are turning to alternative coins, reducing mining profits.
Earlier on Thursday, Ethereum, the world’s second-largest blockchain network, moved its Consensus algorithm to PoS to enhance efficiency and reduce energy consumption. However, the software update also meant that miners were no longer “needed” to secure the network, and as a result, operators moved their machines to other PoW blockchains.
See also: The Merge completed – Ethereum moves to Proof-of-Stake
“GPU mining is dead less than 24 hours after The Merge,” Ben Gagnon, director of mining at Bitcoin Mining company Bitfarms (BITF) tweeted. ” The three largest GPU chains have very low returns, and “the only ones that show returns have no Market Cap or liquidity,” he added.
The hash rate, or computing power, used to mine PoW altcoins such as Ethereum Classic (ETC) and Ravencoin (RVN) doubled in the hours after The Merge took place. However, along with the rising hash rate, the difficulty increases, which means that miners are less likely to successfully mine a block and reap block rewards.
The reward for mining an Ethereum Classic block about 24 hours ago was ETC 0.0186484, or about 70 cents, but in the past hour, that number has dropped to just ETC 0.00030658, or about 11 cents, according to data from Minerstat. Similarly, RVN miners were able to earn 30.28478584 RVN or $1.77 per block 24 hours ago, and in the last hour, that number has dropped to just 0.82968431 RVN or about 5 cents.
“As expected, too many ETH miners have switched to ETC,” Ethan Vera, chief operating officer of mining services company Luxor Technologies, tweeted on Thursday.
“Even running next-generation hardware with less than 3 cents of power is not profitable on ETC now… That electricity price is much lower than what U.S. households pay and even what industrial consumers like bitcoin miners pay in some parts of the country.”
Vera estimates that 20%-30% of Ethereum miners have moved to other networks, with the rest simply shutting down their mining operations.
